The Computer Online Forensic Evidence Extractor (Cofee) is a USB thumb-drive developed by Microsoft that was distributed to more than 2000 law-enforcement officers in 15 countries including the United States, Germany, New Zealand and Poland. Software on the device supports more than 150 commands that eliminates the need to seize the computer from the scene because it can gather the evidence right there.
The commands can be used to decrypt passwords, analyze the Internet activity and data that is stored on the computer. The advantage of this method is that data can be analyzed while the computer is still connected to a network or the Internet which would not be possible of the computer would be seized.
Some blogs have gone so far as to assume that Microsoft would give Vista backdoor keys to the police but the original article at the Seattle Times did not mention that at all. The tools on the USB device provide a set of commands that speed up the evidence gathering process and allow that process to be started while the computer is still running in its local environment.
The original Seattle Times article seems to support that by quoting the head of the Special Assault Unit in the King County Prosecuting Attorney’s Office.

The 35 individual law-enforcement agencies in King County, for example, don’t have the resources to investigate the explosion of digital evidence they seize, said Johnson, who attended the conference.
“They might even choose not to seize it because they don’t know what to do with it,” she said. “… We’ve kind of equated it to asking specific law-enforcement agencies to do their own DNA analysis. You can’t possibly do that.”

I think it is fair to assume that Microsoft is providing the tools and probably even the training, or at least training manuals, so that law-enforcement agents won’t face the decision of what to do with the computers.